Chap 2 Inno Mision Statement

Strategic Management Concepts: A
Competitive Advantage Approach

Sixteenth Edition
Chapter 2
The Business Vision and
Mission
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
Learning Objectives (1 of 2)
2.1 Describe the nature and role of vision statements in
strategic management.
2.2 Describe the nature and role of mission statements in
strategic management.
2.3 Discuss the process of developing a vision and mission
statement.
2.4 Discuss how clear vision and mission statements can
benefit other strategic-management activities.
2.5 Describe the characteristics of a good mission
statement.
2.6 Identify the components of mission statements.
Learning Objectives (2 of 2)
2.7 Evaluate mission statements of different organizations
and write effective vision and mission statements.
Vision Statement
A vision statement should answer the basic question:
“What do we want to become?”
What Do We Want to Become?
• The vision statement should be short, preferably one
sentence, and as many managers as possible should have
input into developing the statement.
• The vision statement should reveal the type of business
the firm engages.
Vision Statement Examples
• General Motors’ vision is to be the world leader in
transportation products and related services. (Author
comment: Good statement)
• PepsiCo’s responsibility is to continually improve all
aspects of the world in which we operate-environment,
social, economic creating a better tomorrow than today.
(Author comment: Statement is too vague; it should
reveal how the firm’s food and beverage business
benefits people)
Mission Statement (1 of 2)
• A declaration of an organization’s “reason for being.”
• It answers the pivotal question “What is our business?”
• It is essential for effectively establishing objectives and
formulating strategies.
Mission Statement (2 of 2)
• It reveals what an organization wants to be and whom it
wants to serve
• It is also called a creed statement, a statement of purpose,
a statement of philosophy, a statement of beliefs, and a
statement of business principles
Figure 2-1 A Comprehensive Strategic-
Management Model
Source: Fred R. David, “How Companies Define Their Mission,” Long Range Planning 22, no. 3 (June 1988): 40. See
also Anik Ratnaningsih, Nadjadji Anwar, Patdono Suwignjo, and Putu Artama Wiguna, “Balance Scorecard of David’s
Strategic Modeling at Industrial Business for National Construction Contractor of Indonesia,” Journal of Mathematics
and Technology, no. 4 (October 2010): 20.
Developing Vision and Mission Statements
A widely used approach includes:
• Select several articles about these statements and ask all
managers to read these as background information.
• Ask managers themselves to prepare a vision and mission
statement for the organization.
• A facilitator or committee of top managers should then
merge these statements into a single document and
distribute the draft statements to all managers.
• A request for modifications, additions, and deletions is
needed next, along with a meeting to revise the document.
Importance of Vision and Mission
Statements
• To make sure all employees/managers understand the
firm’s purpose or reason for being.
• To provide a basis for prioritization of key internal and
external factors utilized to formulate feasible strategies.
• To provide a basis for the allocation of resources.
• To provide a basis for organizing work, departments,
activities, and segments around a common purpose.
Table 2-2 Ten Benefits of Having a Clear
Mission and Vision
1. Achieve clarity of purpose among all managers and employees.
2. Provide a basis for all other strategic planning activities, including internal and
external assessment, establishing objectives, developing strategies, choosing
among alternative strategies, devising policies, establishing organizational
structure, allocating resources, and evaluating
performance.
3. Provide direction.
4. Provide a focal point for all stakeholders of the firm.
5. Resolve divergent views among managers.
6. Promote a sense of shared expectations among all managers and employees.
7. Project a sense of worth and intent to all stakeholders.
8. Project an organized, motivated organization worthy of support.
9. Achieve higher organizational performance.
10. Achieve synergy among all managers and employees.
Characteristics of a Mission Statement (1 of 4)
• A good mission statement allows for the generation and
consideration of a range of feasible alternative objectives
and strategies without unduly stifling management
creativity.
• A mission statement needs to be broad to reconcile
differences effectively among, and appeal to, an
organization's diverse stakeholders
• Stakeholders
– include employees, managers, stockholders, boards of
directors, customers, suppliers, distributors, creditors,
governments (local, state, federal, and foreign), unions,
competitors, environmental groups, and the general
public.
1. Broad in scope; does not include monetary amounts,
numbers, percentages, ratios, or objectives
2. Fewer than 150 words in length
3. Inspiring
4. Identifies the utility of a firm’s products
5. Reveals that the firm is socially responsible
6. Reveals that the firm is environmentally responsible
7. Includes nine components: customers, products or
services, markets, technology, concern for
survival/growth/profits, philosophy, self-concept, concern
for public image, concern for employees
8. Reconciliatory
9. Enduring
A Customer Orientation (1 of 3)
A mission statement should:
• Define what the organization is and what the organization
aspires to be
• Be limited enough to exclude some ventures and broad
enough to allow for creative growth
• Distinguish a given organization from all others
A mission statement should also:
• Serve as a framework for evaluating both current and
prospective activities
• Be stated in terms sufficiently clear to be widely
understood throughout the organization
• A good mission statement reflects the anticipations of
customers.
• The operating philosophy of organizations should be to
identify customers' needs and then provide a product or
service to fulfill those needs.
Considerations (1 of 2)
• Do not offer me things.
• Do not offer me clothes. Offer me attractive looks.
• Do not offer me shoes. Offer me comfort for my feet and
the pleasure of walking.
• Do not offer me a house. Offer me security, comfort, and a
place that is clean and happy.
• Do not offer me books. Offer me hours of pleasure and the
benefit of knowledge.
• Do not offer me CDs. Offer me leisure and the sound of
music.
Considerations (2 of 2)
• Do not offer me tools. Offer me the benefits and the
pleasure that come from making beautiful things.
• Do not offer me furniture. Offer me comfort and the
quietness of a cozy place.
• Do not offer me things. Offer me ideas, emotions,
ambience, feelings, and benefits.
• Please, do not offer me things.
Mission Statement Components (1 of 2)
1. Customers-Who are the firm’s customers?
2. Products or services-What are the firm’s major products
or services?
3. Markets-Geographically, where does the firm compete?
4. Technology-Is the firm technologically current?
5. Survival, growth, and profitability-Is the firm committed
to growth and financial soundness?
Mission Statement Components (2 of 2)
6. Philosophy-What are the basic beliefs, values,
aspirations, and ethical priorities of the firm?
7. Self-concept (distinctive competence)-What is the
firm’s major competitive advantage?
8. Public image-Is the firm responsive to social,
community, and environmental concerns?
9. Employees-Are employees a valuable asset of the firm?
Example Mission Statements (1 of 2)
PepsiCo
• We aspire to make PepsiCo the world’s (3) premier
consumer products company, focused on convenient foods
and beverages (2). We seek to produce healthy financial
rewards for investors (5) as we provide opportunities for
growth and enrichment to our employees (9), our business
partners and the communities (8) in which we operate. And
in everything we do, we strive to act with honesty,
openness, fairness and integrity (6).
• Author comment: Statement lacks three components:
Customers (1), Technology (4), and Distinctive
Competence (7); 62 words
Example Mission Statements (2 of 2)
Royal Caribbean
• We are loyal to Royal Caribbean and Celebrity and strive for
continuous improvement in everything we do. We always provide
service with a friendly greeting and a smile (7). We anticipate the
needs of our customers and make all efforts to exceed our customers’
expectations. We take ownership of any problem that is brought to our
attention. We engage in conduct that enhances our corporate
reputation and employee morale (9). We are committed to act in the
highest ethical manner and respect the rights and dignity of others (6).
• Author comment: Statement lacks six components: Customers
(1), Products/Services (2), Markets (3), Technology (4),
Survival/Growth/Profits (5), and Public Image (8); 86 words
Exemplary Proposed Mission Statement (1 of 2)
Avon
• Our mission is to provide women (1) quality fragrances,
cosmetics, and jewelry (2) at reasonable prices backed by
outstanding customer service provided by our thousands
of door-to-door sales representatives (7, 9) operating
globally (3). We use the latest technology (4) to profitably
develop and market products desired by women all over
the world (5). Avon representatives put integrity first (6) in
setting a good example in every community (8) they
operate-as they sell beauty. (58 words)
Exemplary Proposed Mission Statement (2 of 2)
L’Oreal
• Our mission is to design, produce, and distribute the
world’s best fragrances, perfumes, and personal care
products (2) to women, men, and children (1) by utilizing
the latest technological improvements (4). We empower
our highly creative team of researchers to develop safe,
eco-friendly (7) products that will enable our firm to
profitably grow (5) through thousands of retail outlets. We
strive to be one of the most socially responsible (8) firms
on the planet (3) and appreciate our employees (9) making
that happen, while following the “golden rule” in all that we
do (6). (85 words)
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Strategic Management Concepts: A

Competitive Advantage Approach

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